Reading Tea Leaves

by Kiko Matsing

Mad Hatter's Tea Party

More condescension from the left at The New Yorker:

One thing voters do want is jobs. But even here populist sentiment is at odds with itself. People want the government to help provide jobs, but they also want it to cut the deficit. Of course, one can worry about rising long-term debt and still think that, right now, more deficit spending is crucial to the nascent recovery. But angry voters aren’t that nuanced in their thinking: they want the government to tighten its belt and fight unemployment at the same time. Not that they believe that the government’s efforts will do any good: three-quarters of Americans think that much of the money in the first stimulus program was wasted, perhaps because they can’t see all the jobs that the stimulus saved, only the nearly eight million jobs that the economy has lost.

(from The Populism Problem, James Surowiecki, 15 Feb 2010)

Angry voters aren’t that nuanced in their thinking? Why do these commentators from elite media establishments keep insisting that average Joe doesn’t get it, when their ilk in government are being voted out one by one?

Perhaps because they can’t see all the jobs that the stimulus saved? Instead of nebulous rhetoric, let’s roll our sleeves and actually crunch the numbers…

Between Feb. 17 and Dec. 31, the government doled out $57,864,901,449 in federal contract, grant and loan awards yielding 1,239,457 jobs. That computes to $46,686 per job created, saved, funded or fabricated.

Why not simply write a check in that amount to each new job holder? It would be a lot easier and cheaper.

(from Obama signs on to Keynesian pyramid scheme, Caroline Baum,, 5 Feb 2010)

And who says deficit spending is a necessary trade-off for economic recovery in a recession? It is not an economic law writ in stone, but an untested Keynesian theory. (Underline mine.)

Washington repeatedly fails because it refuses to admit that almost without exception government actions do not increase employment on net. Only the private sector in pursuit of opportunity can create jobs on net. The best we can hope from government is that it keeps to a minimum the jobs it prevents and the income and wealth it destroys.

The good news is that recoveries happen and they happen because an economy that enjoys flexible markets and flexible prices adjusts. It adjusts in good times and in bad. It adjusts to whatever mistakes led to the recession. It adjusts to whatever damage is done during the recession. To get the unemployment much below 10 percent over the next year will require policies that help the economy to heal itself, to adjust more quickly.

Government can move the economy toward a strong enough growth rate to bring down unemployment first and foremost by improving the confidence of families and businesses in a prosperous future.

(from The Jobs Summit: Jobs Failure 2.0, J.D. Foster, The Foundry, 3 Dec 2009 )

Problem is, it is not only Surowiecki’s pedigreed breed who think voters just don’t get it, it is the President himself. (Underline mine.)

Q: How confident are you there will be that kind of consensus for that double-edged approach?

THE PRESIDENT: I am just a eternal optimist — (laughter) — and so — it’s the right thing to do. And all I can do is just to keep on making the argument about what’s right for the country and assume that over time people, regardless of party, regardless of their particular political positions, are going to gravitate towards the truth. Okay?

(from Obama press conference, Feb. 9, 2010, Transcript, Chicago Sun Times)

Wow. What spectacular messianic complex: now he has the revealed truth, we just need to gravitate towards it. He actually thinks that the problem with his economic policies is not substance, just spin. Well, when this Mad Hatter’s cup of popularity runs out, he will not be surprised when he finds tea leaves at the bottom.

More discussion on Obama’s deficit spending: